Arrowhead Research
Corporation (Nasdaq:ARWR) announced that the Company has agreed to increase
its ownership in its majority-owned subsidiary Unidym, Inc. through a stock
exchange ("the Agreement") with certain holders of Unidym's
Series A Preferred Stock. Each share of Unidym Series A Preferred Stock is convertible
into 1.68 shares of Unidym common stock. Unidym is a market leader in high value
carbon nanotube (CNT) production and applications, with a near-term focus on
displays.

Under the Agreement, Arrowhead is exchanging an aggregate of 1,564,610 restricted
shares of Arrowhead common stock for an aggregate of 1,564,610 shares of Unidym
Series A Preferred Stock with the holders. The Agreement provides for a one-year
lock up on sales of the exchanged Arrowhead stock. As a result of the Agreement,
Arrowhead's ownership in Unidym will increase to 58.1% from 51.5%.

"We see Unidym as an important value generator for Arrowhead going forward,
and this transaction enables us to increase our upside potential without expending
cash," stated Dr. Christopher Anzalone, Arrowhead's President and
CEO. "We were pleased with Unidym's progress last year in commercial
sales of its high-end, proprietary CNT materials and its establishment of strategic
partnerships and joint development agreements with major LCD and touch panel
manufacturers. Unidym's technology has the potential to be a disruptive
force in the electronics industry, with near-term opportunities in the substantial
touch-screen and LCD markets, and longer term, via additional applications in
such diverse industries as solar energy and printable electronics. We look forward
to increased participation in Unidym's future success."